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Costs swell at America's most infamous weapons lab

Betting on 'efficiencies'

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The costs at Los Alamos National Laboratory continue to rise with a new management regime failing to provide any concrete answers as to how it will cover the additional charges.

Lab director Michael Anastasio this week revealed that Los Alamos expects to pay close to $85m per year in gross receipts taxes (GRT) to the state of New Mexico. The charges arise as a result of private consortium Los Alamos National Security (LANS) LLC taking control of the lab in July. The University of California - the previous manager for six decades - did not have to pay GRT to New Mexico because of its non-profit status.

UC did, however, have to pay GRT from time-to-time when it contracted work out to private companies. Anastasio declared that UC paid up to $35m a year in taxes, meaning LANS will have to pay close to $50m more per year.

That $50m will be added to the $79m LANS can earn for meeting certain performance objectives. In the past, UC's performance bonus topped out at $8m.

In addition, LANS will incur new contract costs, additional retirement costs and some other basics that occur with the hand over of a 9,000-person lab. All told, the new management could be eating into about 10 per cent of the lab's $2bn budget.

How will it make up for these costs without firing workers?

"Anastasio said the lab is expected to cover the costs through efficiencies," the AP reports after covering a meeting between the director and a legislative committee.

Given the lab's track record of mismanagement, it would be hard to greet Anastasio's promise of "efficiencies" with anything but skepticism.

Los Alamos has been chided as a careless, smug and complacent operation over the years, which is precisely why UC lost its decades old contract to a LLC made up of Bechtel, UC and two other government contractors - Washington Group International and BWX.

The idea is that a for-profit concern will reinvigorate Los Alamos - he who birthed "the bomb" - and restore the lab's reputation as perhaps America's finest laboratory.

So far, however, there has been little proof than LANS is up to the task. The consortium is promising "efficiencies" but offers little in the way of concrete detail as to how it will pull off these efficiencies. In the meantime, ex lab staffers continue to complain that Los Alamos's glory days have faded with many of the top scientists departing for jobs at universities and other labs.

"The lab for quite a few decades has been recognized as doing some of the very best science research independent of the weapons lab," said John Ziebarth, the former head of the Advanced Computing Laboratory at Los Alamos, who left the lab to join the Krell Institute in 2005. "I don't know if that will continue or not at Los Alamos.

"I think the lab is on a path to be a weapons lab and to do what it takes to support the defense nature of the work they do. Whether or not it will become the place where science can excel again remains to be seen."

Another former Los Alamos computer scientist Erik Hendriks, who now works at Google, added, "There are major concerns there. The profit motive is dangerous at a place like that."

A number of workers have serious fears that the budget cuts will result in the loss of their jobs with it being easier for an LLC to dispose of workers than it was for UC.

Los Alamos spokesman Jeff Berger has downplayed the workers' shift from "public employees" under UC to "at will" status under LANS. "At will is a term that means different things to different people," he told us. "Many people use it in a way that suggests employees surrender all protections, and that is absolutely not true."

And yet LANS doesn't seem all that comfortable with the "at will" terminology either. We discovered that a former employee contract which read "Employment at Will" at the start of one paragraph has been changed to read "Employment Relationship" but retained similar language in the body of the paragraph.

"With at will, if you open your mouth, they basically can get rid of you without any due process," said Los Alamos worker Manny Trujillo.

Berger countered this as well by saying, "Our culture is one of openness and effective communication. We want people to speak up. We would have a bias against people not speaking up."

Who knew an LLC could develop an entire culture of openness in just six weeks?

You can read more about the issues facing Los Alamos in this story from the Economist. ®

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